Doing Inventory Can Save Your Business

If you are a retailer or manufacturer of physical products, performing inventory is critical to the success of your business. While you may have software systems in place to track items, nothing takes the place of a physical count at least once each year.

Just how important is inventory? We had a retail client who had not performed an inventory in 18 years. Yes, I said 18 years. When we finally convinced her to take stock, she was stunned to find that she had the equivalent of three years of product on hand. Three years of capital stuck in a back room!

She sold off much of this inventory at a drastic markdown to bring the stock to more appropriate levels. Donating some of the items that were out of date and just not saleable anymore resulted in a nice tax credit. Immediately, the client's cash flow and profit margins improved dramatically.

Now, with ongoing monitoring, she's able to minimize the amount of capital tied up in inventory and move items through her business more effectively. As a result, she easily draws more income from the business and takes more time off.

Could inventoried items be holding your business back? Unless you count them, you'll never know.

Fern Gordon is the owner of The Profit Line. Making sound business decisions means having a clear picture of your financial situation in front of you at all times - yet the daily demands of running a small enterprise can be overwhelming. As a result, financial record keeping and reporting often don't get the attention they truly deserve.
The Profit Line changes all that. We are your bookkeeping partner, helping you stay on top of your finances so you can make better, more informed business decisions.
In addition to taking paperwork off your plate, we also pinpoint the key numbers critical to the performance of your specific enterprise, and make sure you have them in hand whenever you need them.The Profit Line